Real Estate Math
A rental property produces NOI of $36,000 per year. If a buyer requires an 8% return, what would they pay for the property?
A$288,000
B$360,000
C$450,000✓ Correct
D$244,800
Explanation
Value = NOI ÷ Cap rate = $36,000 ÷ 0.08 = $450,000. To solve this, multiply the relevant values: $36,000 at 8%.. The correct answer is $450,000.. This is a common calculation on the Nebraska real estate exam.
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